Dividend Yield Stocks

August 28, 2012 High dividend yield stocks offer a safe haven to investors where safety has greater priority compared to high returns. Hence, even if the market remains volatile, going ahead, an investor can still get a decent return on investment, thanks to good dividend yielding stocks. The dividends are paid no matter what direction the stocks move and can provide a higher yield on investment in a weak market. Exhibit 1: High dividend yield stocks
Company Name Tamil Nadu Newsprint & Paper Munjal Auto Industries Gujarat Industries Power Company Neyveli Lignite HPCL Electrosteel Castings Titagarh Wagons PTC India Mangalore Chemicals & Fertilizers HEG Indian Oil Corporation IDBI Bank Unichem Laboratories Navneet Publications
Source: Capitaline, ICICIdirect.com Research

Ex Dividend Dividend Date % Idirect Code TAMNEW 12/9/2012 50 GUJCYC 13/09/2012 100 GUJIP 7/9/2012 25 NEYLIG 30/08/2012 28 HINPET 30/08/2012 85 ELECAS 30/08/2012 50 TITWAG 6/9/2012 80 POWTRA 12/9/2012 15 MANCHE 18/09/2012 12 HEG 7/9/2012 50 INDOIL 5/9/2012 50 IDBI 31/08/2012 15 UNILAB 13/09/2012 150 NAVPUB 20/09/2012 40

Stock return (%) Face Value Dividend Dividend per CMP (|) Mcap (|) yield (%) share (|) (27/08/2012) (| cr) 1 month 3 month 10 4.4 5.0 114 789 1.2 16.3 2 4.4 2.0 45.65 228 -11.4 -20.0 10 3.6 2.5 68.6 1038 6.7 11.4 10 3.4 2.8 82.3 13808 1.1 15.9 10 2.7 8.5 316.45 10716 -5.1 5.3 1 2.7 0.5 18.7 611 3.6 -2.9 10 2.6 8.0 305.35 612 1.1 -0.1 10 2.6 1.5 57.1 1684 3.6 5.6 10 2.6 1.2 46.05 546 0.9 15.1 10 2.5 5.0 203.75 814 -1.3 -1.9 10 2.0 5.0 248.4 60310 -4.8 -6.4 10 1.8 1.5 84.2 10764 -1.1 -3.2 2 1.8 3.0 170.7 2027 14.3 29.7 2 1.5 0.8 53.55 1276 -4.5 0.2

There are four basic dates associated with the dividend declaration and payment 1. Dividend declaration date: This is the date on which the board of directors announces to shareholders the quantum of dividend that will be paid by the company. 2. Ex-dividend date - On (or after) this date the security trades without its dividend. If an investor buys a dividend paying stock one day before the ex-dividend he/she will still get the dividend. However, if the stock is bought on the ex-dividend date, the investor will not get the dividend. 3. Record date - This is the date on which the company looks at its records to see who the shareholders of the company are. An investor must be listed as a shareholder to ensure the right of a dividend payout. 4. Dividend payable date - This is the date when the company mails the cheques for the dividend amount due to the shareholders who appear on the register of shareholders. Illustration:
Dividend Declaration Date 23/07/2012 Ex-Dividend Date 25/08/2012 Record Date 27/08/2012 Dividend Payable Date 04/09/2012

From the above illustration, for a person to be eligible for dividend, he/she has to buy the shares before 25/08/2012. To be eligible for dividend, shares can be purchased between July 23, 2012 and August 24, 2012. If the person buys on the ex-dividend date i.e. August 25, 2012, the person would not be eligible for dividend.

ICICI Securities Ltd | Retail Equity Research

Pankaj Pandey

Head Research ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai 400 093 research@icicidirect.com

pankaj.pandey@icicisecurities.com

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ICICI Securities Ltd | Retail Equity Research

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